Earnings season is in full swing again this week, especially in the OTC markets. To many of the juniors that trade on the Over the Counter Bulletin Board exchange, quarterly reports are merely a technicality in order to maintain SEC compliance as there is not much to actually report as far as developments or earnings. To others, however, that are revenue-generating, their numbers are watched very closely by shareholders and potential investors to see if the given company is moving forward and working through these tough economic times. For purely fundamental traders, it is the lifeblood of much of their research.
A diversified boutique, Access Plans, Inc. (OTCBB:APNC) is a leading membership benefits marketing company with two distribution channels designed to maximizing members’ savings and purchasing power. Its wholesale/retail plans distribution channel specializes in turnkey, private-label membership benefit plans that provide discount products and services, protection benefits and retail services to more than one million customers in the United States and Canada. Its insurance marketing distribution channel, America's Health Care Plans (AHCP), is one of the nation's largest independent agent networks and provides major medical, life and supplemental insurance products to individuals.
Business has been going well for Access and today’s report on the second quarter and first half of fiscal year 2011 shows it. While revenue for the quarter produced a mild gain of 2% as compared to the year prior ($13.8 million versus $13.5 million), operating income soared by 144% to $3.1 million as compared to roughly $1.3 million in the same quarter of 2010. Net income percentage gains topped that, posting a 155% increase to $1.9 million as compared to $700,000 the year earlier.
The first half of fiscal 2011 produced record-setting numbers for Access Plans. On a half-year basis, revenues picked up the pace and increased by 5% to $28.1 million as compared to $26.8 million for the first half of fiscal year 2010. Net income also rose by 107% to $3.4 million during that time frame. Access attributes the strong growth to refined variable expenses and continued membership growth.
It is important to note that these figures were generated during a time where business may have been hampered to some degree as a result of mandated changes from the Healthcare Reform Act and the launch of the Company’s Smart Solutions series, a supplemental insurance and discount program that went live in the second quarter. This was a prescient move by Access to counteract damage from the government mandates and set the stage for continued future growth.
While many small and mid-capitalization companies are flat in the banking department, Access strengthened their position there as well in the last six months. Cash, cash equivalents and restricted cash increased 48% during the first half of FY2011, from $6.2 million on September 30, 2010 to $9.1 million on March 31, 2011. Also appealing and a relatively rare occurrence in these markets, Access Plans does not have any long-term debt outstanding.
Fear not if you missed the conference call that was held today at 1 PM EDT to discuss recent corporate activities and future plans. A replay will be available one hour after the call through Monday, May 23 at 9:00 a.m. EDT by dialing 877-344-7529 (U.S.) or 412-317-0088 (international) and entering the conference ID Number 450839. Additionally, the CC will be accessible on the Company’s website at www.accessplans.com until the same date.
There are many skeptics that fear the OTC markets, often times for no justifiable reason. While it may be true that the actions of some have dirtied the name for all, there are legitimate, solid companies generating substantial revenue with their shareholders reaping the rewards. Shares of APNC have risen from the area of 80 cents in October 2010 to pushing on 10-year highs with a share now costing $2.35 heading into the closing bell.
